HomeMy WebLinkAbout05/05/2026 09.A. Presentation on Affordable Housing Fund (Fund 185) 'V
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 9.A.
For Meeting of: May 5, 2026
ITEM TITLE: Presentation on Affordable Housing Fund (Fund 185)
SUBMITTED BY: Sara Watkins, City Attorney
SUMMARY EXPLANATION:
City Council directed staff to bring back to a meeting information regarding how the City could utilize the
affordable housing tax credit and examples of what other jurisdictions are doing with their affordable
housing tax credit funds.
ITEM BUDGETED: N/A
STRATEGIC PRIORITY 24-25: A Thriving Yakima
RECOMMENDATION:
ATTACHMENTS:
1406_April_2026.pptx
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AFFORDABLE HOUSING TAX
CREDIT
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HB 1406 Sales Tax Retention for
Affor dabl e Housing
State Statute a I lows three uses of funds
1. Construct Housing
"' Acquiring, rehabilitating, or constructing affordable housing, which
aht may include new units of affordable housing within an existing
structure or facilities providing supportive housing services under
RCW 71.24.385
2. Supportive Housing
01 Funding the operations and maintenance costs of affordable or
supportive housing
3. Rental Assistance
11194• Provide Rental Assistance to tenants
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State Eligibility
• Housing and services provided with the 1406 funds can only be provided to
persons whose income is at or below 60% of the median income of the city
imposing the tax. According to census.gov, the median household income in the
City of Yakima is $59,228. 60% of the median household income is $35,536.80.
• If funding is going towards the development of owner-occupied affordable housing,
the funds can only be provided to persons whose income is at or below 80% of the
median income of the city imposing the tax. 80% of the median household income
is $47,382.40.
• The 1406 tax retention amount expires 20 years after the date on which the tax is
first imposed, so approximately 2040.
• In determining the use of funds, the city must consider the income of the
individuals and families to be served, the leveraging of the resources made
available, and the housing needs within the jurisdiction. RCW 82.14.540.
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The City Adopted HB 1406 Sales Tax
Retention for Affordable Housing
Current Ordinance: YMC 7.92: Affordable Housing Incentive Program
• Applicants can use funds to pay for connection fees for water and/or sewer
utilities if the applicant is creating ten or more new dwelling units and 50% of
those units are affordable. Funding can be provided pro rata.
• Affordable housing means housing wherein the households earn 50% or less
than the Yakima County median household income, adjusted for family size.
• Units must remain affordable for 50 years, and record a covenant against the
property.
• To receive CHIP grants, the City was required to have a program associated with
the 1406 funds.
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Revenue Received by the City
• City has collected funds _
starting in 2020
, ii• Total Revenue as of =r�
October 2025: � ;Foist .
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$887,219.93 Wake list. — -=-==
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• None has been spent
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Possible Amendments
■ Change the affordability period to 25 years, which is
the same as the CHIP grants
■ Increase the AMI to 60% or less than the Yakima
County median household
■ Expand the uses of the money to other statutorily-
allowed uses in addition to connecting affordable
housing to city water and/or sewer
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